How to Calculate Schedule Variance in Project Management?
One of the essential functions of project managers is keeping projects on the agreed-upon schedule. If any project exceeds the time budgeted for it, the costs rise rapidly.
These costs can be minimized with regular performance variance analyses.
The variance analysis allows you to control the project scope and every successful project manager should be able to expertly perform it.
In this post, you’ll find the info about how to calculate Schedule Variance and a simple example of the concept.
What is Schedule Variance in Project Management?
Schedule Variance (usually abbreviated as SV) is an indicator of whether a project schedule is ahead or behind. It’s typically used within Earned Value Management (EVM).
Schedule Variance can be calculated by subtracting the Budgeted Cost of Work Scheduled (BCWS) from the Budgeted Cost of Work Performed (BCWP).
- BCWS measures the budget for the entire project
- BCWP measures the cost of actual work done.
The difference is the schedule variance.
Here we have a special formula:
- SV = Schedule Variance
- EV = Earned Value
- PV = Planned Value
(There is also one more visualization of the formula, where SV = schedule variance, BCWP = budgeted cost of work planned, BCWS = budgeted cost of work scheduled).
All units are monetary (dollars, euros, etc.).
This formula demonstrates the following:
- you are ahead of schedule if the Schedule Variance is positive.
- you are behind your schedule if Schedule Variance is negative
- you are right on schedule if Schedule Variance is zero
If the project is completed, SV becomes zero, because at the end of the project all Planned Value has been earned.
- SV = -$300 – the project is behind schedule.
- SV = $0 – the project is right on schedule.
- SV = $300 – the project is ahead of schedule.
Calculating Schedule Variance example
It’s not a secret that it’s better to get information when it’s visualized. Especially, if we talk about calculations and formulas. So I’ll not discover the continent – you may find a clear and simple example of calculating Schedule Variance in the following short video:
Schedule Variance calculation tips and warnings
It’s good to share Schedule Variance formulas and metrics with the stakeholders of your project.
There is something that the formulas above do not take into account. Here are some tips and warnings that can be helpful:
- Calculate a baseline Schedule Variance to complete the formal portion of the project planning process. This is critical to be able to assess how your project is going.
- 2) Track scheduling conflicts. As an example: if a milestone on your Gantt chart is earlier than the predecessor, there is an inflexible constraint. Review the schedule to ensure that this constraint is necessary.
- When Schedule Variances are identified, there can also be Cost Variances associated with them. Cost Variance is also important as Schedule Variance. You must complete your project within the approved budget and the exceeding planned budget is negative for you and stakeholders.
- Do not hesitate to check your variance calculations twice.
- Track your projects’ quality, not just the Schedule and Cost Variances. Just because a project is ahead of schedule or on the budget does not mean that quality setbacks are not a real threat.
Schedule Variance is a great tool to analyze project “health”. If the variance is positive, this means that your project is progressing well. However, if SV looks negative, then something is wrong and you have to take corrective action to bring your project back on track.
This concludes this brief review of Schedule Variance. Feel free to leave comments if you have something to add.